hich of the following would not be acceptable as a measure of basic investment risk? a)Expected Return b) Range of Returns c)Variance of Returns d)Standard Deviation of Returns

Q: Why will the standard deviation not be a good measure of risk when returns are negatively skewed

A: The standard deviation of returns is a measure of the volatility of market returns and determines…

Q: ch of the following is NOT true with respect to standard deviation as a measure of risk? Group of…

A: Standard deviation is one of the most important statical tools used in finance and it show the…

Q: standard deviation of historical returns Market beta Tracking error risk Discuss in what scenario…

A: In financial terms, risk can be defined as the possibility that the real profits from an outcome or…

Q: When describing the attitude of investors towrds risk, which statement is correct? A.Investors may…

A: Risk attitude of an investor can be classified into three category i.e. risk seeker, risk averse and…

Q: What is the relationship between correlation and the risk of the portfolio's rate of return? i.…

A: Correlation represents the degree of relationship between the movement of prices of assets in a…

Q: which of the following quantifies how closely a manager's return pattern follows that of a benchmark…

A: Managers' performance is evaluated on the basis of pattern that follows with benchmark index.

Q: Portfolio standard deviation is negatively associated with the covariance among the assets in the…

A: The portfolio standard deviation is the financial measure which computes the investment risk and…

Q: What is efficient set? Explain why rational investors will never chose a portfolio below the minimum…

A: What is efficient set?  Various configurations of securities yield various degrees of returns. The…

Q: Some assumptions of  Markowitz Portfolio Theory are said to be : (a)   Investors consider each…

A: Markowitz Portfolio Theory, developed by Harry Markowitz in 1952, is a mathematical framework for…

Q: What assumption about risk-adjusted techniques for measuring performance poses a potential problem?…

A: RISK ADJUSTED TECHNIQUES  Investors want to look beyond performance when evaluating portfolios…

Q: The Capital Asset Pricing Model (CAPM) asserts that an asset’s expected return is equal to the…

A: Based on CAPM, Expected return on security = Risk free rate + Beta * Market risk premium

Q: 15. Standard deviation can be used to measure a) Risk of an investment, b) Return of an investment,…

A: The correct answer is: a) Risk of an investment.

Q: Discuss the difference between a price-weighted index and a value-weighted index. Give one example…

A: "Hi, Thanks for the Question. Since you asked multiple question, we will answer first question for…

Q: When determining the riskiness of a stand-alone instrument (not included in a portfolio), which of…

A: The asset risk is classified into 2 terms  One is stand alone risk in which we consider  only the…

Q: Another name for the expected value of an investment would be: a. The mean value b. The risk-free…

A: The expected value (EV) is an anticipated value for investment at some point in the future. In…

Q: ional investors will never choose a portfolio low the minimum variance point. Also show at this…

A: Efficient set  is set of portfolio which gives maximum return on given level of risk. no other…

Q: What are the risk implications for an investor for a returns series that exhibits fat tails?

A: Fat tails means that there are more than three standard DEVIATION movements more than normal…

Q: the relation between market returns and investor sentiment, and (ii) the relation between market…

A: (Markets end in red over poor investment sentiments)

Q: The contribution of an individual asset to the riskiness of a fully diversified portfolio depends…

A: A portfolio is made up of two or more than two stocks. A well-diversified portfolio is that…

Q: 9. Martin company purchased an equipment in exchange of an installment note, promising to pay…

A: Annual payment = $16,000Rate = 6%Number of years = 4 years

Q: True or false: The most important characteristic in determining the expected return of a…

A: Portfolio diversification is a strategic approach to risk management in investment that involves…

Q: What is the expected return on a portfolio? How can the expected return on a portfolio be…

A:

Q: In conducting a sensitivity analysis, the only parameter that represents a measure of worth is:a.…

A: Sensitivity analysis A financial model which helps in determining how the target variables get…

Q: Q3. Explain the following A) Measure of historical returns (Single Asset) B) Measure of historical…

A: Return= Total gain/loss on an asset over a given period of time.

Q: omparing Value at Risk (VAR) and Expected Shortfall (ES), which is preferred by regulators for…

A: VAR that is value at risk and another is ES expected shortfall these are two methods to measure the…

Q: The additional compensation that investors require to take on higher risk investments is the a.…

A: The risk associated with an investment refers to the probability of loss that an investor bears when…

Q: The greater the variability of the possible returns on an investment, _________. a. the lesser the…

A: Variability is a measure of how much variation each return exhibits to the mean return. It is also…

Q: Which of the following statements is true for compensation of risk? a. Higher the risk, lower is the…

A: The Statement for compensation of risk is as under-

Q: investments with low return variances usually: a. have a high return standard deviation b. have…

A: d. none of these options   SINCE THE INVESTMENTS WITH  LOW RETURN VARIANCE HAS LOW STANDARD…

Q: Which of the following is not recognized as a measurement of risk? O median Orange best case/worst…

A: Median and Range are not typically recognized as direct measurements of risk, while the other…

Q: What are the factors in determining the expected rate of return of LPs? Group of answer choices a.…

A: Limited partners (LPs) are investors in a limited partnership, such as a venture capital (VC) fund…

Q: A "risk-premium" is the difference between ___________________________ . A) the variance of a…

A: Solution:- Capital Asset Pricing Model (CAPM) is the equity model to determine the expected rate of…

Q: If we are speaking about the CAPM model and undiversifiable risks.    Then what is meant by…

A: CAPM model The Capital asset pricing model (CAPM) refers to an idea that describes the systematic…

Q: What information would be required to compute the risk-asset ratio under Basle I?

A: The risk asset ratio (RAR) measures the amount of a bank's total regulatory capital in relation to…

Q: A financial risk is not possible to evaluate with Select one from the following options. mean value…

A: Financial risk is the risk or probability of loss made on an investment. There are various inputs…

Q: .Which performance measure(s) contend(s) that unique risk should theoretically be non-existent in a…

A: Systematic risk refers to the risk that cannot be diversified. It is inherent to the market segment.…

Q: Which of the following are measurements of risk? range coefficient of variation mean average…

A: The measurements of risk are range, coefficient of variation, standard deviation, and median.…

Q: Compare and contrast systematic and unsystematic risk and how it affects a portfolio.

A: Risk in a portfolio refers to the likelihood of losing money or not achieving the desired returns on…

Q: Examine (i) the relation between market returns and investor sentiment, and (ii) the relation…

A: the relationship between the market returns investor sentiment and conditional volatility is stated…

Q: According to modern financial theory, the correct measure of risk is Idiosyncratic Risk Variance…

A: Theer are various measures of risk when it comes to the company's investment in different financial…

Q: According to the CAPM, the main factor that explains the performance of an asset is given by the...…

A: The formula to determine the expected return of a stock using CAPM is as follows: Required Return =…

Q: How does the application of the standard deviation differ from the application of the coefficient of…

A: a. Standard Deviation: The average fluctuation of a variable around the mean is known as standard…